Poole: Contract Law

ANSWERS - SELF TEST - AGREEMENT AND CERTAINTY

1. Is a display on supermarket shelves an offer or an invitation to treat? (1)

Give an authority for your conclusion. (1)
A display on supermarket shelves is an invitation to treat. (1)
The authority for this is the Boots case: Pharmaceutical Society of Great Britain v
Boots Cash Chemists (Southern) Ltd. (1)

2. There are some special rules which apply to unilateral contracts. State four such
rules (giving authority for each proposition stated). (4)
(a) A unilateral advertisement is an offer and not an invitation to treat. (1)
Authority = Carlill v Carbolic Smoke Ball Co.
(b) A unilateral offeror will be taken to have impliedly waived the requirement for
communication of acceptance (unless he makes the contrary clear in his offer). The
performance of the act is a sufficient acceptance. (1) Authority = Carlill v Carbolic
Smoke Ball Co.
(c) A unilateral offer cannot be revoked once the offeree has started to perform the
requested act. (1) Authority = Errington v Errington
(d) In the case of a unilateral offer to the world at large it is not necessary to actually
communicate a revocation of an offer to every potential offeree. It is sufficient if the
revocation is issued in the same channel as was used to make the offer and it is
then irrelevant if individual offerees do not see it. (1) Authority = American case of
Shuey v US.

3. What is the postal rule? (1) Give a case example to illustrate this rule. (1)
The postal rule states that if the post is the proper method of acceptance,
acceptance is complete as soon as the letter of acceptance is properly posted. (1)
Possible authorities: (1) for any ONE of these.
Adams v Lindsell
Household Fire Insurance v Grant
Henthorn v Fraser

4. What is the case authority for the fact that the postal rule may be ousted by
requiring actual communication? (1)
Holwell Securities Ltd v Hughes (1).

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[As an alternative you could cite the judgment of Thesiger LJ in Household Fire
Insurance v Grant. Either of these will gain the point - but in relation to the second
alternative you must give the judge's name as well as the Household Fire case].

5. Explain the mirror image rule. (1)

The mirror image rule states that in order to be an acceptance in fact, any
acceptance must correspond with the exact terms proposed by the offeror. (1)

What is the effect of introducing a new term or amendment of the offer terms when
the offeree purports to accept? (2) Give authority for this last proposition. (1)
If the offeree purports in his "acceptance" to introduce any new terms or to make
amendments to the offer terms, he is making a COUNTER-OFFER (1) which has the
effect of rejecting the original offer and represents a new offer on the terms
proposed which the original offeror can accept if he wishes. (1)
Authority for this last statement should be given as Hyde v Wrench. (1)

6. What is the leading case authority on battle of forms? (1)

What does this case decide? (2)
Butler Machine Tool Co. Ltd v Ex-Cell-O Corpn (England) Ltd (1)
This case decides (you must state the majority decision) that by using different terms
the buyers made a counter-offer (last shot) (1), which was expressly accepted by the
sellers when they completed and returned the acknowledgement slip stating that
they accepted the buyers' order on the terms and conditions of the buyer. (1)

7. Dickinson v Dodds can be cited as authority for two propositions of law. What are
they? (2)
(a) As an example of the firm offer rule, i.e. that although the offeror may have
stated a period during which the offer is open, unless that promise is supported by
consideration given in exchange, the offeror is nevertheless free to revoke his offer
during that period. (1)
(b) The revocation of an offer need not be communicated to the offeree by the
offeror as long as the fact of revocation has been communicated to the offeree. (1)

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 Poole: Contract Law

8. What did the Court of Appeal decide in Blackpool & Fylde Aero Club v Blackpool
BC? (1)
CA held that the invitation to tender gave rise to a binding obligation to consider
conforming tenders, i.e. those tenders conforming to the conditions set out in the
invitation to tender. (1) (Arguably the basis of this is a unilateral promise to this
effect, followed by a bilateral contract awarding the work. If the unilateral obligation
is broken, i.e. a conforming tender is not considered, the remedy is in damages
only.)

9. If the offeror has prescribed a particular method of acceptance and has not made
that method mandatory, when will acceptance by a different method suffice? (2)
Give an authority for this principle. (1)
It will suffice if:
(a) The purpose in prescribing the method was to benefit the offeree and the offeree
can therefore waive a stipulation for his own benefit. (1)
(b) If the purpose in prescribing the method was to benefit the offeror or offeree,
then any method that is no less disadvantageous to the intended beneficiary will
suffice. (1) For example, if the purpose is to benefit the offeror by seeking to ensure
a quick reply, then any method just as quick or quicker will suffice.

Authority you should cite is Manchester Diocesan Council for Education v

Commercial & General Investments Ltd. (1). Alternatively you may cite Tinn v
Hoffman & Co. [No points for Yates v Pulleyn since it is not a general authority on
this principle. It is too specific regarding the offeree's position.]

10. Cite three cases that discuss the effect of telex communications and briefly
explain the significance of each decision. (3)
One point for ANY of the following cases. Maximum of 3.
Entores Ltd v Miles Far East Corp. held that a message sent by telex was
communicated at the place where it was received (and contract made at the place of
receipt), so that the actual communication rule applied to such communications.
The Brimnes (Tenax Steamship Co. Ltd v The Brimnes) telex messages sent to a
business within office hours were actually communicated when received by the
recipients machine. They did not need to be actually read in order to be
communicated.

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 Poole: Contract Law

Brinkibon Ltd v Stahag Stahl GmbH confirmed the decision in Entores and
indicated that this general rule will not cover instances such as non-instantaneous
telex messages. In these situations the position would have to be resolved by
reference to the intentions of the parties, by sound business practice and in some
cases by a judgment where the risks should lie (Lord Wilberforce).
Mondial Shipping & Chartering BV v Astarte Shipping Ltd expressly applying
comments of Lord Wilberforce in Brinkibon - telex message sent to a business
outside ordinary business hours- communicator could not have expected the
recipient to have received the message (sent late Friday evening - communicated on
Monday morning).

11. What is the significance of the decision in Errington v Errington? (2)

It is Court of Appeal (1) authority for the fact that revocation of a unilateral offer is
not possible once the offeree has entered on performance of the act. (1)

12. How is it possible to distinguish Errington and the decision of the House of Lords
in Luxor v Cooper? (2)
By stating that Luxor is House of Lords authority for the principle that a unilateral
offeror will be free to revoke his offer despite the fact that the offeree has entered on
performance of the act where the offer contemplates that the offeror is to be free
to revoke at any time until complete performance of the act. (1) In Errington the
terms of the offer were different and did not imply that the offeror should be free to
revoke at any time before ALL the instalments had been paid. (1)

13. Which of the following statements is correct? (1)

Shuey v US decides that:
(a) It is not necessary to communicate a revocation of a unilateral offer;
(b) It is not necessary to communicate revocation in the case of unilateral
offers to the whole world;
(c) It is sufficient, in the case of a unilateral offer to the whole world where the
offerees are unascertained, to communicate the revocation via the same
channel as used for the offer;
(d) It is sufficient to communicate the revocation of a unilateral offer via the
same channel as used for the offer.

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 Poole: Contract Law

Only (c) is fully correct since this rule only applies to revocations of unilateral offers
made to unascertained offerees (e.g. offers to the whole world). (1)

Points scored [maximum of 30] =

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Adam Shaw-Mellors, 2016. All rights reserved.